ARLINGTON, Va. -- The U.S. economy continues to decline, but if businesses and consumers can get through a painful start to 2009, there is potential for improvement in late 2009 and into 2010, according to the Manufacturers Alliance/MAPI.
The Manufacturers Alliance/MAPI predicts that inflation-adjusted gross domestic product (GDP) will decline 2.1 percent in 2009 before rebounding to 2.2 percent growth in 2010.
"We are in the midst of a very severe global recession in manufacturing which looks to be the worst recession since 1973-1974 in terms of depth and duration," said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. "Manufacturing did not create the problem but is paying the price for the problems that began in the financial markets."
Manufacturing production growth declined 2.5 percent in 2008, and is expected to decline 9.2 percent this year. In 2010, it is expected to grow by 2.5 percent.
Production in non-high-tech industries is expected to decline 8.4 percent in 2009 before increasing by 2.2 percent in 2010. High-tech industrial production will likely decline 9.6 percent in 2009 before rebounding to 5.9 percent growth in 2010.
Exports and imports will both take a downturn in 2009. Exports are expected to decrease 8.3 percent in 2009 before growing 1.2 percent in 2010. Imports will decline 10.8 percent in 2009 and increase 7.1 percent next year.
Unemployment is expected to average 8.5 percent in 2009 and 9 percent in 2010.
“There are some positives,” Meckstroth acknowledged. “The decline in oil prices is like a $230 billion tax cut to consumers and personal tax cuts in the fiscal stimulus will, to some degree, offset the falling house prices. The current production rates in some industries are below replacement levels, and consumers cannot postpone purchases indefinitely, so there will be a bounce-back from this extremely low floor."
For more information, visit http://www.mapi.net